If you run a business and have some spare cash, you may wish to put it in a business savings account to earn interest rather than leaving it to sit idly in your business current account. In this article, we take a look at the best business savings accounts for your business.
If you are looking to set up a business account or looking to see if your business current account is the best on the market, you may also be interested in the following articles:
What is a business savings account?
A business savings account works in the same way as a personal savings account, but it is specifically designed to be used for a business and so cannot be used for personal savings. You may wish to open a business savings account if you want to earn a higher rate of interest than your business current account is offering. There are three main types of business savings account: easy access, fixed-rate and notice accounts. Before opening a business savings account, consider the different types of savings accounts and your business's cash flow as each type of account has a different term for when you can access the money. We explain the different types of business savings accounts below:
- Easy access business savings accounts - An easy-access business savings account allows you to add and withdraw money without restrictions. As a result, interest rates are usually lower than on other saving accounts.
- Fixed-rate business savings accounts - A fixed-rate business savings account, also known as a fixed-rate bond account, will usually offer a fixed interest rate for a set period of time. You will not be able to access the money until the term ends and once the term is over the interest rate usually drops.
- Notice business savings accounts - A notice business savings account requires you to give notice before withdrawing any funds from your account. This usually ranges between 7 and 180 days.
Do I need a business savings account?
Companies registered with companies house in the UK are legally required to separate business finances from personal accounts which will include business savings accounts. Sole traders and freelancers aren't legally required to keep business finances separate but having a business account may make it easier to manage business finances.
Interest on a business savings account is paid gross which means that the rate of interest applied to the account does not include tax deductions and the responsibility of how much tax needs to be paid - if any - will fall on you and your accountant.
Best business savings accounts
Below, we share some of the best business savings account rates in the market. If you have an existing business bank account, you may wish to enquire with your banking provider to see if it offers a savings account, although it is unlikely to be the best savings rate on the market. In the below tables, we share the best business savings accounts in the market right now, which are sourced by SavingsChampion.co.uk.
Best Business Easy Access savings accounts
| Allica Bank | Tide | Cynergy Bank | HTB | Kent Reliance | |
| Account name | Instant Access Savings | Tide Business Savings Account* | Business Saver - Issue 5 | Easy Access SME Saver (Issue 6) | Business savings account - issue 9 |
| Interest rate | 4.08% | 4.07% | 4.00% | 3.95% | 3.94% |
| Minimum opening balance | £50,000 | £1 | £1 | £5,000 | £1 |
| How to manage the account |
Mobile Banking, Online |
Online | Online | Email, Online, Telephone | Online |
| How to apply | Mobile, Online | Mobile, Online | Online | Online | Online |
| FSCS | Own Licence | Own Licence | Own Licence | Shared Licence | Own Licence |
Source: theprivateoffice.com: Updated 19/12/2024
Best Business Fixed Rate Bonds savings accounts
| Union Bank of India | United Trust Bank | UBL | UBL | State Bank of India | |
| Account name | Fixed Rate Deposit - 1 Year | Business 15 Month Bond | 2 Year Fixed Term Deposit | 3 Year Fixed Term Deposit | Green Fixed Deposit - Five Year |
| Term | 1 year | 1.25 years | 2 years |
3 years |
5 years |
| Interest rate | 4.80% | 4.60% | 4.36% |
4.41% |
4.35% |
| Minimum opening balance | £1,000 | £5,000 | £2,000 |
£2,000 |
£10,000 |
| How to manage the account | Branch, Email, Post | Email, Post, Telephone | Branch, Post |
Branch, Post |
Branch, Online, Post |
| How to apply | Branch, Post | Online, Post | Branch, Post |
Branch, Post |
Branch, Post |
| FSCS | Own Licence | Own Licence | Own Licence |
Own Licence |
Own Licence |
Source: theprivateoffice.com: Updated 19/12/2024
Best Business Notice savings accounts
| United Trust Bank | DF Capital | United Trust Bank | Allica Bank | Allica Bank | |
| Account name | Business 200d Notice Account Issue 2 | 90 Day Notice Business Account (Issue 1) | 180-Day Notice Base Rate Tracker | 180-day Notice Savings Account (Issue 1) | 95-Day Notice Business Savings Account - Issue 1 |
| Interest rate | 5.00% | 4.76% | 4.75% | 4.70% | 4.60% |
| Notice Period | 200 days | 90 days | 180 days | 180 days | 95 days |
| Minimum opening balance | £5,000 | £20,000 | £500 | £20,000 | £20,000 |
| How to manage the account | Email, Online | Online, Post | Email, Mobile Banking, Online, Telephone | Mobile Banking,
Online |
|
| How to apply | Online, Post | Online | Email, Post, Telephone | Mobile, Online | Mobile, Online |
| FSCS | Own Licence | Own Licence | Own Licence | Own Licence | Own Licence |
Source: theprivateoffice.com: Updated 19/12/2024
Things to consider before choosing a business savings account
Before choosing the best business savings account there are some things you should consider which we explain in more detail below.
Type of account
When opening a business savings account you will need to consider which type of account is best for your business. This is because the interest rate and access period will vary depending on the type of account. Notice accounts require you to give notice before you can access the money, fixed-rate accounts lock in a competitive interest rate for a set amount of time which can be for a number of years and easy access accounts have fewer restrictions but usually lower interest rates.
Access to the money
Another thing to consider is when you will need to access the money as some of the business savings accounts have time restrictions on when the money can be accessed once deposited. Some of these time restrictions can be for a number of years.
Minimum deposits
Most business savings accounts will have a minimum deposit amount required to open the account. This can range from £1 to tens of thousands of pounds so you will need to consider how much you can afford to put away when choosing a business savings account.
Account management
How the business savings account can be managed is something you should consider before opening the account as not all business savings accounts allow you access to online banking, some can only be managed via a bank branch or by post.
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